EDITORIALS.

New Zealand Mail, Issue 867, 12 October 1888, Page 27

EDITORIALS.

Public Opinion,

In every part of tlie Colony the report of the “Bank of New Zealand Committee seems to have been received with the most cordial and outspoken approval. This io a very healthy symptom. It would not have been at nil strange had the traditions of extravagant speculation and fictitious values which so long held sway in New Zealand still prevailed in sufficient force to inspire complaints that the Committee had “ fouled their own nest,” had “ indulged in sensational suggestions and panic-mongering,” had needlessly depreciated property values, or had doue something else in the shape of wholesome candour, which it, has long been the fashion to stigmatise in these trite forms of denunciation. For one effect of such a report and ot such recommendations must obviously be to lower the nominal value alike of the bank shares and of properties similar in character to securities now declared to have been so largely overvalued. Everyone recognises this. Xet the feeling on all hands is nevertheless one of unmistakable satisfaction and even pleasure that a course which is plainly seen to be the right and proper and judicious one has at last been taken. Already there is substantial proof that public confidence has been revived. The bank shares were stated to be in firm demand yesterday week at £7, with no sellers. That price is of course equivalent to par, allowing for the writing off of the lost capital. From London come equally encouraging accounts of the renewed confidence inspired by the Committee’s report, with this important addition, that a full statement of the bank’s position has been submitted to the searching investigation of the chief' financial houses, capitalists, and banks in London with results so satisfactory that £200,000 of new capital was at once subscribed privately by some leading capitalists who have not previously been associated with the bank, and whose support will be in itself a tower of strength to the institution, while a superabundance of additional capital was offered and declined. This speaks volumes. The Committee assuredly deserve the thanks of the whole community for the unflinching thoroughness with which they have performed their by no means agreeable task, and the bank is very fortunate in having possessed at a critical period so able, resolute, and courageous an officer as Mr Murray, whose acumen first detected the unsatisfactory condition of affairs, and whose firm interposition checked the downward course on which the institution had entered. There are three features in the report which cannot but command particular approbation. The first is the unmistakable manner in which tue Committee intimate that the bank’s administration is being placed on a new and sound footing by the resolute elimination of those who are responsible for the proceedings so severely and justly condemned, in the report, and for the consequent heavy losses to which the shareholders have been subjected. The' second commendable feature is the intimation that those whoso conduct is so severely censured are to be brought to a stern reckoning. Both these measures are but simple justice, and assuredly ought to be carried out if only as a salutary example. The Committee plainly imply that the administration is to be purged of its evil elements, and this is manifestly essential to the , prosperous, future of the bank. The third feature is the distinct implication that Auckland influence has been in the past so prejudicial- to the welfare of the institution that another chief centre of operations is preferable. The wopds of the Com- ! mittee are very clear. They say : - “ lu Auckland we regret to find that, : though the head office for the bank is there, and its affairs are under the immediate eye of the Directors, tli9 general character of much of the business carried on has been most objectionable, and the policy pursued open to grave censure. Inflated schemes, or proposals coming from or influenced by certain persons, appear to have met with ready support by lavish advances to companies and individuals without adequate security or warrantable prospect of advantage, or even safety, to the bank. Such advances not only account for more than half tho whole loss now disclosed, but the securities held, being more or -ess un-

productive, curtail the earning power of the bank pending their realisation.’" This plainly indicates the desirableness of a removal of the bank’s headquarters from the region of such ad verse influences.